Health expenditure Australia 2023–24

Australian Government spending

In 2023–24, Australian Government health spending was $106.2 billion, representing a $1.0 billion real decrease (0.9%) compared to 2022–23 (Table 10). This decline was below the average annual real growth rate of 2.5% over the decade to 2023–24.

The decreases in Australian Government spending during the two-year period 2022–23 to 2023–24 were mainly due to decreases in grants to states and territories (down 10.1% in 2022–23 and 2.8% in 2023–24) and in direct Australian Government spending by 8.2% in 2022–23 and 0.6% in 2023–24. Health spending associated with the health insurance premium rebate increased by 1.9% in 2023–24 (Table 12). 

The biggest decrease for Australian Government health spending was in public health (including spending on COVID-19 vaccines and rapid antigen tests), unreferred medical services and community health.

Spending relative to government expenses

In 2023–24, the Australian Government spent $106.2 billion on health, accounting for 15.5% of total government expenses. This was approximately 0.4 percentage points lower than in 2022–23 (Figure 9), indicating that nominal health spending by the Australian Government grew more slowly than other areas of government expenditure (Table 11).

Figure 9: Ratio of Australian Government health spending to Australian Government expenses, current prices, 2013–14 to 2023–24

Sources: AIHW Health Expenditure Database; Australian Bureau of Statistics (ABS 2024b) (Table 11).

Spending programs

Australian Government spending in 2023–24 (Figure 10) comprised:

• direct Australian Government spending ($64.6 billion, or 60.8%), mostly administered through the Department of Health, Disability and Ageing on programs for which the government has responsibility, such as the MBS, PBS, and health research. This also includes some health spending by Defence ($666 million). 
• grants to states and territories ($31.5 billion, or 29.6%), including National Health Reform funding (mainly for public hospitals), other National Partnership Payments (NPPs) and the PBS Section 100 funding for public hospitals.
• rebates and subsidies for privately insured individuals under the national Private Health Insurance Act 2007 ($6.9 billion, or 6.5%).
• DVA funding for goods and services provided to eligible veterans and their dependants ($3.2 billion, or 3.0%).

The 0.9% decrease in Australian Government health spending between 2022–23 and 2023–24 can be attributed to decreases in spending through specific Department of Health, Disability and Ageing programs ($0.4 billion decrease) and funding to states and territories through grants ($0.9 billion decrease). The main driver of these decreases was the winding down of public health programs in the aftermath of the COVID-19 pandemic. 

Figure 10: Australian Government total health spending by program, constant prices ^(a), 2013–14 to 2023–24

⁽ᵃ⁾ Constant price health spending is in 2023–24 prices.

Notes

1. Australian Government own program spending, mostly administered through the Department of Health, Disability and Ageing on programs for which the government has responsibility, such as the MBS, PBS, health research and capital consumption. This also includes some health spending by the Department of Defence since 2019–20.
2. Grants to states include the Commonwealth Government National Health Reform funding, other National Partnership Payments (NPPs) and the funding of PBS section 100 programs in public hospitals.
3. Spending on the medical expenses tax rebate is not included.
4. Tax revenue has been deducted from Australian Government own program spending.

Source: AIHW Health Expenditure Database (Table 12).

Area of spending

During 2023–24, more than one-third (35.7%) of Australian Government health spending was allocated to primary health care, including public health ($37.9 billion) (Figure 11). Of this:

• pharmaceuticals subsidised through the PBS (not including Section 100 drugs and other drugs that could be allocated to the areas of public hospital services and private hospitals) contributed $14.6 billion.
• unreferred medical services (mainly visits to a general practitioner) was $11.5 billion.
• public health was $3.4 billion.
• other health practitioner services were $3.1 billion (Table A6). 

Figure 11: Australian Government health spending, by area of spending, constant prices ^(a), 2013–14 to 2023–24

 ⁽ᵃ⁾ Constant price health spending is in 2023–24 prices.

Notes:

1. Other services include patient transport services, aids and appliances, and administration.
2. Spending on the medical expenses tax rebate and capital is not included.

Source: AIHW Health Expenditure Database (Table 13).

Spending on public hospitals was the next largest component of Australian Government health spending with $33.1 billion, followed by referred medical services at $16.2 billion (Figure 11, Table 13). Total public hospital spending by the Australian Government included an estimate for government benefits paid for in-hospital MBS services ($790 million). This figure was estimated based on government benefits for Medicare funded services allocated to public hospitals by the proportions derived from Hospital Casemix Protocol (HCP) data. However, this is unlikely to capture the full amount for MBS spending on non-admitted patients which, according to the NHFB, could be as high as $1,009 million. The AIHW is continuing to work with the department, the NHFB and HEAC to address this data gap.

The amount of $33.1 billion of the Australian Government spending on public hospital services includes 

• National Health Reform funding – the Australian Government funding for public hospital services under NHRA 
• PBS section 100 programs (Highly Specialised Drugs, PBS Efficient Funding of Chemotherapy program, Chemotherapy Pharmaceutical Access Program (CPAP) and the Special Authority Program (trastuzumab - Herceptin), Botulinum Toxin Program, and Human Growth Hormone program) delivered through hospitals
• some specific programs administered by the Department of Health, Disability and Ageing
• In-hospital MBS services, 
• Other National Partnership Payments
• Health spending by DVA
• Premium rebates (an allocation of the private health premium rebates)
• and Department of Defence and capital consumption allocated to public hospitals. More details can be found in Table A11.

The decrease in total Australian Government spending between 2022–23 and 2023–24 was primarily driven by a reduction in primary health care expenditure (mostly due to a decrease in public health by $1.4 billion, a decrease in unreferred medical services by $0.6 billion, and a decrease in community health and other by $0.2 billion) (Figure 11). 

Over the decade since 2013–14, private hospitals experienced the highest average annual growth rate in the Australian Government health spending (4.3% per year), followed by public hospital services (4.1% per year) and primary health care including public health, (2.4% per year) (Figure 11). 

Private health insurance premium rebates

In 2023–24, the rebate for private health insurance premiums paid by the Australian Government was $6.9 billion, a real increase of $130 million (1.9%) compared to 2022–23 (Figure 12). The rebate amount presented here is an estimate of the rebate paid out as benefits (to estimate health spending). This is done to exclude spending on non-health related items such as health insurance advertising. It is therefore smaller than the total rebate paid to individuals to reduce premiums, which are reported elsewhere (such as in Department of Health, Disability and Ageing and ATO annual reports). More details on the estimation can be found in the Overview of data sources and methodology.

Figure 12: Health insurance premium rebates as health spending, constant prices ^(a), 2013–14 to 2023–24

⁽ᵃ⁾ Constant price health spending is in 2023–24 prices.

Notes:

1. The premium rebate is pro-rated across all expense categories (including change in provisions for outstanding claims). The rebate includes rebates paid through the tax system as well as rebates paid to funds, which directly reduce premiums.
2. Other services include patient transport services, aids and appliances, and administration.

Source: AIHW Health Expenditure Database (Table 14).

Department of Veterans’ Affairs spending

In 2023–24, the DVA spent $3.2 billion on health, mostly on hospitals ($1.2 billion), primary health care ($0.9 billion) and referred medical services ($0.7 billion). Total DVA spending grew by 4.1% in 2023–24 in real terms (Figure 13a). Note that DVA changed their reporting system of health expenditure since 2020–21 which has some impacts on the time series of health spending in this report. Therefore, caution should be exercised when comparing results between years.

DVA spending on hospitals declined over the decade to 2023–24, with public hospitals decreasing by an average of 7.7% per year and private hospitals by 5.1% in real terms. Once again, note that the change of DVA reporting system affected the growth rates over the years. DVA spending on primary health care also decreased in real terms by a yearly average of 3.7%, accompanied by an average decrease in spending on referred medical services by 2.2%. During this period, other services (including patient transport services, aids and appliances, and administration) increased by 5.3%.

Based on the number of people in the DVA treatment population (which includes all DVA Orange, Gold and White cardholders), DVA spent $10,893 on health per member of the treatment population in 2023–24 which is 8.5% higher than the health spending per person in the total Australian population ($10,037). This average health spending per member of the DVA treatment population peaked in 2014–15 and decreased over the period 2015–16 to 2022–23, then rose slightly by $121 per client (or 1.1%) in real terms in 2023–24 (Figure 13b). 

This recent downward trend in the health spending per member of the DVA treatment population is due to the decline in the number of Veteran Gold Card Holders and increase in those of Veteran White Card Holders. DVA will pay for the hospital treatment costs for Veteran White Card holders for accepted conditions or conditions under non-liability health care whereas all hospital services that meet the clinical needs of Veteran Gold Card holders are paid by DVA.

Figure 13a: Department of Veterans’ Affairs health spending by area of spending, constant prices ^(a), 2013–14 to 2023–24

⁽ᵃ⁾ Constant price health spending is in 2023–24 prices. 

Source: AIHW Health Expenditure Database (Table 15).

Figure 13b: Average health spending per client of the DVA treatment population and per person in the Australian resident population, constant prices (a), 2013–14 to 2023–24 ($)

⁽ᵃ⁾ Constant price health spending is in 2023–24 prices.

Sources: AIHW Health Expenditure Database; Australian Bureau of Statistics (2025a); Department of Veterans' Affairs (2024) (Table 15)

Department of Defence health spending

In 2023–24, the Department of Defence (Joint Health Command) spent $666.0 million on health. This was an increase of 8.0% ($49.4 million) from 2022–23 in real terms. In 2023–24, the biggest area of spending was other health practitioners ($232.6 million), followed by referred medical services ($150.9 million), unreferred medical services ($111.7 million), private hospitals ($91.1 million), dental services ($40.9 million) and all other medications ($11.4 million).

The amounts shown represent actual health expenditure by Defence for its ADF and APS employees that could be categorised as per AIHW’s area of expenditure classification, including direct spending on health care to members, direct costs of pharmaceuticals purchased by Defence and costs for administration, including the Defence electronic health record. 

Note that it is not possible to reconcile this exactly against other departmental financial reporting because some expenditure within the Joint Health Command is not related to patient care and because of the accounting practices (for example, cost accrual) employed in departmental reporting. There are also areas of health expenditure within the Department that cannot be extracted from Departmental reporting such as building maintenance and other infrastructure costs, and material used within the operational environment.